Medical Office Feasibility Study in Utah

Utah physician loans: at par, and clean

Utah's medical office record sits right on the national line for size: the median of $343,050 is 1.00x the physician practice median nationally. The location quotient of 0.96x is close to parity as well, the class places 9 of 39 among Utah asset classes, and 144 approvals worth $108.4 million from FY2017 to FY2026 rank Utah 14 of 53. None of the screened measures passes our distinctness margin against both Utah's all-class record and physician offices nationwide. What does stand out is the outcome record and the program mix.

No losses, few cancellations

Not one of the 71 Utah practice loans disbursed in FY2017 to FY2021 is charged off, so the floor is 0.00% to date and the five-year figure is the same. Cancellation is low too, at a floor of 5.5% for Utah physician approvals from FY2017 to FY2024, with the ceiling identical because nothing in the cohort waits on disbursement. These are floors on open loans, but for a lender the Utah charge-off record could not be cleaner.

Ownership through 504, and the lenders

SBA 504 carried 41 of the 144 Utah loans against 103 under 7(a), a sizeable share that shows many Utah practices buying their own buildings. Utah's central half of physician approvals stretches from $150,000 to $859,600. Among 7(a) lenders, Central Bank leads with 16 loans worth $9.7 million, Mountain America FCU has 11 worth $3.6 million, Zions Bancorporation, National Association 9, and First Utah Bank and Wells Fargo Bank National Association 7 each. Franchising is negligible at 0.69%. Salt Lake County holds 67 approvals and Utah County 32, with Washington at 11 and Davis at 10. FY2018 and FY2024 each brought $18.5 million.

Where a Utah practice buys its building through 504, the feasibility study carries two loads. It has to show the practice's demand, payer mix and physician capacity can service the debt on a loan near $343,050 or more, and it has to support the appraisal of a medical building that may need to be leased to another tenant someday. For a new practice, that means proving patient demand in the specific community against existing clinics and hospital-owned groups; for an acquisition, testing retention after the seller leaves. Debt service coverage should be shown on collections, not gross charges.

No coding caveat is attached to physician offices in our data; the Utah counts follow the industry code on each loan.